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Hyderabad Witnessed Gross Absorption of 6.8 Million sq ft in 2018, Highest in the Last Eight Years: Colliers International India

PTI hyderabad
Updated: 13-02-2019 14:01 IST
Hyderabad Witnessed Gross Absorption of 6.8 Million sq ft in 2018, Highest in the Last Eight Years: Colliers International India

HYDERABAD, India, February 13, 2019/PRNewswire/ --

2018 witnessed gross absorption of 6.8 million sq. ft., the highest in the last eight years; this outcome reflected heightened leasing activity by IT-ITeS occupiers. Large transactions (deals greater than 1.0 million sq. ft.) constituted 63% of leasing activity during the year. The IT-ITeS sector continued to be the dominant demand driver, accounting for 87% of transactions, followed by flexible workplace operators on 10%. The endeavour to push the state's gaming and animation industry also contributed to rising demand from technology companies, among other initiatives to attract occupiers.

"We expect office market to witness strong demand from IT-ITeS occupiers over the next couple of years. The strong pipeline suggest that developers are capitalizing buoyant demand," says Arpit Mehrotra, Senior Director, Office Services (Bengaluru & Hyderabad) at Colliers International India.

Although the number of deals transacted in 2018 declined YoY, large size deals pushed the average deal size to almost double to 64,400 sq. ft. This indicates rising business confidence of technology occupiers as the city offers requisite talent pool, infrastructure and facilities. It is expected that the occupier demand to remain strong, supported by the upcoming supply over the next three years. The steady demand in the SBD micromarket to push rents up 10% by the end of 2019.

In Q4 2018, Hyderabad witnessed new Grade A supply of about 1.4 million sq ft, totaling 4.3 million sq ft for 2018. Colliers forecast new Grade A office completions of 38.4 million sq ft over 2019-21. More than 90% of the upcoming supply is concentrated in the SBD micromarket, a market that has attracted occupiers owing to high connectivity and large quality developments. As a result, rental values in the SBD appreciated by 8% over 2018 despite the infusion of new supply. They advise developers to adhere to their construction schedules to cater to the steady demand.

About Colliers International Group Inc.

Colliers International Group Inc. (NASDAQ: CIGI) (TSX: CIGI) is a top tier global real estate services and investment management company operating in 69 countries with a workforce of more than 13,000 professionals. Colliers is the fastest-growing publicly listed global real estate services and investment management company, with 2017 corporate revenues of $2.3 billion ($2.7 billion including affiliates). With an enterprising culture and significant employee ownership and control, Colliers professionals provide a full range of services to real estate occupiers, owners and investors worldwide, and through its investment management services platform, has more than $25 billion of assets under management from the world's most respected institutional real estate investors.

Colliers professionals think differently, share great ideas and offer thoughtful and innovative advice to accelerate the success of its clients. Colliers has been ranked among the top 100 global outsourcing firms by the International Association of Outsourcing Professionals for 13 consecutive years, more than any other real estate services firm. Colliers is ranked the number one property manager in the world by Commercial Property Executive for two years in a row.

Colliers is led by an experienced leadership team with significant equity ownership and a proven record of delivering more than 20% annualized returns for shareholders, over more than 20 years.

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Source: Colliers International India PWR PWR